REMEDIES counters of packs and bottles to deter over-removals and

misdeclaration of removals.
1. Sec. 4, NIRC, Power of Secretary of Finance to review rulings
of CIR as implemented by RMC 44-2001, October 11, 2001 (B) (B) Receipts for Payment Mode. - It shall be the duty of the
and DOF Order 7-02, May 7, 2002 Commissioner or his duly authorized representative or an
authorized agent bank to whom any payment of any tax is
DESCRIPTION. All rulings and issuances of the Commissioner of made under the provisions of this Code to acknowledge the
Internal Revenue that pertain to the implementation and payment of such tax, expressing the amount paid and the
particular account for which such payment was made in a
interpretation of the Tax Code of 1997 and other tax laws are
form and manner prescribed therefor by the Commissioner.
valid. However, the Secretary of Finance has the power to
affirm, revise, modify or set aside rulings and issuances BIR
SEC. 9. Internal Revenue Districts. - With the approval of the
concerning such implementation and application of the provisions
Secretary of Finance, the Commissioner shall divide the
of the Tax Code of 1997 and other tax laws.
Philippines into such number of revenue districts as may from
time to time be required for administrative purposes. Each of
The exercise of such power under Section 4 of the Tax Code of
these districts shall be under the supervision of a Revenue District
1997, however, does not cover disputed assessments,
Officer.
refunds of internal revenue taxes, fees or other charges, and
penalties imposed in relation thereto, or other matters arising
SEC. 10. Revenue Regional Director. - Under rules and
under the Tax Code or other laws or portions thereof administered
regulations, policies and standards formulated by the
by the BIR. In these instances, the Court of Tax Appeals has
Commissioner, with the approval of the Secretary of Finance, the
the exclusive appellate jurisdiction pursuant to the second
Revenue Regional director shall, within the region and district
paragraph of the same Section 4.
offices under his jurisdiction, among others:
Neither shall the power be exercised to apply to rulings that are
(a) Implement laws, policies, plans, programs, rules and
deemed void ab initio because they contradict duly issued
regulations of the department or agencies in the regional
Revenue Regulations, Revenue Memorandum Orders, Revenue
area;
Memorandum Rulings, and Revenue Memorandum Circulars.
(b) Administer and enforce internal revenue laws, and rules and
regulations, including the assessment and collection of all
It is important to note that only the final “adverse” decision of
internal revenue taxes, charges and fees;
the Commissioner may be brought to the Department of Finance
(c) Issue Letters of authority for the examination of taxpayers
(DOF) for review.
within the region;
(d) Provide economical, efficient and effective service to the
Notwithstanding, the Secretary of Finance may review motu
people in the area;
proprio the rulings and issuances of the Bureau of Internal
(e) Coordinate with regional offices or other departments,
Revenue concerning such implementation and application of the
bureaus and agencies in the area;
provisions of the Tax Code of 1997 and other tax laws.
(f) Coordinate with local government units in the area;
(g) Exercise control and supervision over the officers and
PERIOD TO FILE APPEAL. Within thirty (30) days from the date
employees within the region; and
of receipt of the adverse ruling of the Commissioner.
(h) Perform such other functions as may be provided by law
and as may be delegated by the Commissioner.
TAX FORMS. No specific BIR numbered form shall be used. The
duplicate copy of the records on file with the BIR pertaining to the
SEC. 11. Duties of Revenue District Officers and Other Internal
taxpayer's request will need to be authenticated and certified by
Revenue Officers. - It shall be the duty of every Revenue District
the BIR.
Officer or other internal revenue officers and employees to ensure
that all laws, and rules and regulations affecting national internal
2. Sec. 6 – 17, NIRC (Sec. 6-7 in next section.
revenue are faithfully executed and complied with, and to aid in
the prevention, detection and punishment of frauds of
Section 8. Duty of the Commissioner to Ensure the Provision and
delinquencies in connection therewith.
Distribution of Forms, Receipts, Certificates, and Appliances, and
the Acknowledgment of Payment of Taxes. -
It shall be the duty of every Revenue District Officer to examine
the efficiency of all officers and employees of the Bureau of
(A) Provision and Distribution to Proper-Officials. - Any law to
Internal Revenue under his supervision, and to report in writing to
the contrary notwithstanding, it shall be the duty of the
the Commissioner, through the Regional Director, any neglect of
Commissioner, among other things, to prescribe, provide,
duty, incompetency, delinquency, or malfeasance in office of any
and distribute to the proper officials the requisite licenses;
internal revenue officer of which he may obtain knowledge, with a
internal revenue stamps; unique, secure and non-removable
statement of all the facts and any evidence sustaining each case.
identification markings (hereafter called unique identification
markings), such as codes or stamps, be affixed to or form
SEC. 12. Agents and Deputies for Collection of National Internal
part of all unit packets and packages and any outside
Revenue Taxes. - The following are hereby constituted agents of
packaging of cigarettes and bottles of distilled spirits; labels
the Commissioner:
and other forms; certificates; bonds; records; invoices;
books; receipts; instruments; appliances and apparatus used
a) The Commissioner of Customs and his subordinates with
in administering the laws falling within the jurisdiction of the
respect to the collection of national internal revenue taxes on
Bureau. For this purpose, internal revenue stamps, or other
imported goods;
markings and labels shall be caused by the Commissioner to
be printed with adequate security features.
b) The head of the appropriate government office and his
subordinates with respect to the collection of energy tax; and
Internal revenue stamps, whether of a bar code or fuson design,
or other markings shall be firmly and conspicuously affixed or
c) Banks duly accredited by the Commissioner with respect to
printed on each pack of cigars and cigarettes and bottles of
receipt of payments internal revenue taxes authorized to be
distilled spirits subject to excise tax in the manner and form as
made thru banks.
prescribed by the Commissioner, upon approval of the Secretary
of Finance.
Any officer or employee of an authorized agent bank assigned to
receive internal revenue tax payments and transmit tax returns or
To further improve tax administration, cigarette and alcohol
documents to the Bureau of Internal Revenue shall be subject to
manufacturers shall be required to install automated volume-
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 the same sanctions and penalties prescribed in Sections 269 and
270 of this Code.
SEC. 13. Authority of a Revenue Officer. - Subject to the rules
and regulations to be prescribed by the Secretary of Finance,
upon recommendation of the Commissioner, a Revenue Officer
assigned to perform assessment functions in any district may,
pursuant to a Letter of Authority issued by the Revenue Regional
Director, examine taxpayers within the jurisdiction of the district in
order to collect the correct amount of tax, or to recommend the
assessment of any deficiency tax due in the same manner that
the said acts could have been performed by the Revenue
Regional Director himself.
SEC. 14. Authority of Officers to Administer Oaths and Take
Testimony. - The Commissioner, Deputy Commissioners, Service
Chiefs, Assistant Service Chiefs, Revenue Regional Directors,
Assistant Revenue Regional Directors, Chiefs and Assistant
Chiefs of Divisions, Revenue District Officers, special deputies of
the Commissioner, internal revenue officers and any other
employee of the Bureau thereunto especially deputized by the
Commissioner shall have the power to administer oaths and to
take testimony in any official matter or investigation conducted by
them regarding matters within the jurisdiction of the Bureau.
SEC. 15. Authority of Internal Revenue Officers to Make Arrests
and Seizures. - The Commissioner, the Deputy Commissioners,
the Revenue Regional Directors, the Revenue District Officers
and other internal revenue officers shall have authority to make
arrests and seizures for the violation of any penal law, rule or
regulation administered by the Bureau of Internal Revenue. Any
person so arrested shall be forthwith brought before a court, there
to be dealt with according to law.
SEC. 16. Assignment of Internal Revenue Officers Involved in
Excise Tax Functions to Establishments Where Articles subject to
Excise Tax are Produced or Kept. - The Commissioner shall
employ, assign, or reassign internal revenue officers involved in
excise tax functions, as often as the exigencies of the revenue
service may require, to establishments or places where articles
subject to excise tax are produced or kept: Provided, That an
internal revenue officer assigned to any such establishment shall
in no case stay in his assignment for more than two (2) years,
subject to rules and regulations to be prescribed by the Secretary
of Finance, upon recommendation of the Commissioner.
SEC. 17. Assignment of Internal Revenue Officers and Other
Employees to Other Duties. - The Commissioner may, subject to
the provisions of Section 16 and the laws on civil service, as well
as the rules and regulations to be prescribed by the Secretary of
Finance upon the recommendation of the Commissioner, assign
or reassign internal revenue officers and employees of the Bureau
of Internal Revenue, without change in their official rank and
salary, to other or special duties connected with the enforcement
or administration of the revenue laws as the exigencies of the
service may require: Provided, That internal revenue officers
assigned to perform assessment or collection function shall not
remain in the same assignment for more than three (3) years;
Provided, further, That assignment of internal revenue officers
and employees of the Bureau to special duties shall not exceed
one (1) year.
3. Sec. 202 – 282, NIRC (to be discussed below).
Read:
a. RR 12-99 implementing the provisions of the NIRC on the
rules of assessment, civil penalties and interest and extra
judicial settlement of taxpayer’s criminal violation under
RMO 1-90 (to be discussed below)
b. RR 18-2013 dated November 28, 2013, Amending Certain
Sections of RR 12-99 Relative to the Due Process
Requirement in the Issuance of a Deficiency Tax
Assessment (to be discussed below).
c. RR 11-2006, June 15, 2006 (Accreditation of Tax
Practitioners to practice before BIR).
REVENUE REGULATIONS NO. 11-2006 ISSUED ON
JULY 21, 2006. Promulgates the consolidated regulations
on the accreditation of tax practitioners/agents as a
prerequisite to their practice or representation before the
Bureau of Internal Revenue (BIR) and further simplifies and
supersedes Revenue Regulations (RR) No. 15-99.
The duties of the Revenue National Accreditation Board
(RNAB) in the National Office and the Revenue Regional
Accreditation Board (RRAB) in each Revenue Region are
the following:
a. To act upon all applications to practice before the BIR;
b. To institute and provide for the conduct of accreditation,
suspension or disaccreditation proceedings; and
c. To perform such other duties as are necessary or
appropriate to carry out their functions as prescribed by
the Secretary of Finance. Provided, however, that any
action or decision of the RRAB shall only become final
upon affirmation by the RNAB and/or by the
Commissioner.
The RRAB and RNAB shall have jurisdiction over the
following persons and shall require their accreditation with
the BIR:
a. Individual tax practitioners engaged in private practice
who are Certified Public Accountants (CPAs), CPA-
Lawyers who issue/sign auditor's certificates or
otherwise perform functions exclusively pertaining to a
CPA and individuals other than CPAs who meet the
qualifications prescribed in these Regulations;
b. Partners of a General Professional Partnership (GPP)
engaged in the practice of taxation, accountancy,
and/or auditing; their duly authorized officers or
representatives who regularly appear or otherwise
engage in tax practice before the BIR;
c. GPP engaged in the practice of taxation, accountancy
and auditing who regularly appears or otherwise
engaged in tax practice before the BIR; and
d. Officers or duly authorized representatives of
incorporated business entities engaged in accounting,
auditing or tax consultancy services.
Individual applicants, GPPs and partners of GPPs who were
already accredited with the Bureau of Accountancy (BOA)
and Securities and Exchange Commission (SEC) shall no
longer be required to undergo the various processes for
accreditation under these Regulations. But they shall
automatically be accredited and issued a BIR Certificate of
Accreditation upon payment of the processing fee.
The following individuals are allowed to appear and practice
before the BIR without undergoing accreditation
proceedings:
a. Individual taxpayers acting on their own behalf,
provided they present satisfactory identification;
b. Members of the Philippine Bar not suffering from
suspension/disbarment. However, they may at their
option, apply for accreditation; and
c. Other individuals presenting satisfactory proof of
identification or authority in any one of the following
circumstances of limited practice or special
appearances:
i. An individual representing a member of his or her
immediate family;
ii. ii. A regular full-time employee representing an
individual employer;
iii. A bona fide officer or a regular full-time employee
in representation of his employer-corporation,
association or organized group;
iv. A trustee, receiver, guardian, administrator,
executor or regular full-time employee in
representation of a trust, receivership,
guardianship or estate; and
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 v. An officer or a regular employee of a government
unit, agency, or instrumentality representing said
unit, agency or instrumentality in the course of his
or her official duties.
The accreditation certificate may be suspended, cancelled or
revoked, as the case may be, upon petition by a taxpayer or
by the PICPA or by the Tax Management Association of the
Philippines (TMAP) and other similar professional
organizations, or upon petition by any internal revenue
officer, or upon motu propio action by the RRAB or RNAB,
after due notice and hearing set for the purpose, based on
any of the following grounds:
a. Conviction of any criminal offense under the Tax Code,
or of any offense involving dishonesty, or breach of
trust;
b. Giving false or misleading information, or participating
in any way in the giving of false or misleading
information to the BIR or to any officer or employee in
connection with any matter pending before them,
knowing such information to be false or misleading;
c. The use of false or misleading representations with
intent to deceive a client or prospective client in order to
procure employment, or representing that he can ably
obtain special consideration or action from the BIR or
officer or employee by improper or unlawful means;
d. Willfully failing to make a tax return in violation of the
NIRC, or evading, attempting to evade, or participating
in any way in evading or attempting to evade any
national internal revenue tax or payment thereof;
e. Knowingly counseling or suggesting to a client or
prospective client of an illegal plan to evade taxes or
payment thereof or concealing assets to evade taxes or
payment thereof;
f. Misappropriating or failing to remit funds received from
a client for the purpose of payment of taxes;
g. Directly or indirectly attempting to influence, or offering
or agreeing to attempt to influence the official action of
any officer or employee of the BIR by the use of threats,
false accusations, duress or coercion, or by offering any
special inducement or promise of advantage or by
bestowing any gift, favor or thing of substantial value;
h. Disbarment or suspension from the practice as an
attorney or as a CPA;
i. Contemptuous conduct in connection with practice
before the BIR, including use of abusive language,
making false accusations and statements, knowing
them to be false, or circulating or publishing malicious
or libelous matter;
j. Giving a false opinion, knowingly, recklessly or through
gross incompetence, including an opinion that is
intentionally or recklessly misleading, or a pattern of
providing incompetent opinions on questions arising
under the Tax Code. False opinion includes those
which reflect or result from a known misstatement of
fact or law from an assertion of a position known to be
unwarranted under existing laws or regulations; from
advising or assisting in conduct known to be illegal or
fraudulent; from concealment of matters required by law
or regulations to be revealed. A pattern of conduct is a
factor that will be taken into account in determining
whether a practitioner acted knowingly, recklessly or
through gross incompetence; and
k. Upon administrative findings by the concerned Board
that the holder of an accreditation certificate has
committed any of the offenses penalized under the Tax
Code
4. RA 9282 March 30, 2004, expanding the jurisdiction of CTA,
elevating it to collegiate court, amending RA 1125 (Effective April
23, 2004)
5. RA 9503, further expanding the composition of CTA.
On June 12, 2008, Republic Act Number 9503 (R.A. 9503) was
enacted and took effect on July 5, 2008. This enlarged the
organizational structure of the CTA by creating a Third Division and
providing for three (3) additional Justices. Hence, the CTA is now
composed of one (1) Presiding Justice and eight (8) Associate
Justices. The CTA may sit en banc or in three (3) divisions with each
division consisting of three (3) Justices. The CTA, as one of the Courts
comprising the Philippine Judiciary, and it is under the supervision of
the Supreme Court of the Philippines.
Previously, only decision, judgment, ruling or inaction of the
Commissioner of Internal Revenue, the Commissioner of Customs, the
Secretary of Finance, the Secretary of Trade and Industry, or the
Secretary of Agriculture, involving the National Internal Revenue Code
and the Tariff and Customs Code on civil matters are appeallable to
the Court of Tax Appeals. The EXPANDED JURISDICTION
transferred to the CTA the jurisdiction of the Regional Trial Courts
and the Court of Appeals over matters involving criminal violation
and collection of revenues under the National Internal Revenue
Code and Tariff and Customs Code. In addition, it also acquired
jurisdiction over cases involving local and real property taxes which
used to be with the Regional Trial Court and the Court of Appeals.
JURISDICTION OF THE COURT OF TAX APPEALS
Civil Tax Cases
Exclusive Original Jurisdiction
Tax collection cases involving final and executory assessments for
taxes, fees, charges and penalties, where the principal amount of
taxes and fees, exclusive of charges and penalties, claimed is one
million pesos or more. (P1,000,000 or more)
Exclusive Appellate Jurisdiction
CTA Division
(1) Decisions and Inaction of the Commissioner of Internal Revenue
in cases involving disputed assessments, refunds of internal
revenue taxes, fees or other charges, penalties in relation thereto,
or other matters arising under the National Internal Revenue or
other laws administered by the Bureau of Internal Revenue;
(a) Inaction of the Commissioner shall be deemed a denial in
which the taxpayer may appeal.
(b) Inaction does not necessarily constitute a formal decision
and the taxpayer may opt to await the final decision of the
Commissioner by constitute a formal decision and the
taxpayer may opt to await the final decision of the
Commissioner beyond the 180 days and may appeal such
final decision.
(c) For claim for refund, the taxpayer must file a petition for
review with the CTA prior to the expiration of the two year
prescriptive period.
(2) Decisions, orders or resolutions of the RTC in local tax cases and
in tax collection cases originally decided or resolved by them in
their ORIGINAL jurisdiction.
(3) Decisions of the Commissioner of Customs in cases involving
liability for customs duties, fees or other money charges, seizure,
detention or release of property affected, fines, forfeitures or other
penalties in relation thereto, or other matters arising under the
Customs Law or other laws administered by the Bureau of
Customs;
(4) Decisions of the Secretary of Finance on customs cases elevated
to him automatically for review from decisions of the
Commissioner of Customs which are adverse to the Government
under Section 2315 of the Tariff and Customs Code;
(5) Decisions of the Secretary of Trade and Industry, in the case of
non-agricultural product, commodity or article, and the Secretary
of Agriculture in the case of agricultural product, commodity or
article, involving dumping and countervailing duties under Section
301 and 302, respectively, of the Tariff and Customs Code, and
safeguard measures under Republic Act No. 8800, where either
party may appeal the decision to impose or not to impose said
duties. (Sec. 7, RA No. 1125 as amended)
CTA en Banc
(1) Decisions or resolutions on motions for reconsideration or new
trial of the Court in Divisions in the exercise of its exclusive
appellate jurisdiction over:
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 (a) Cases arising from administrative agencies – Bureau of
Internal Revenue, Bureau of Customs, Department of
Finance, Department of Trade and Industry, Department of
Agriculture;
(b) Local tax cases decided by the Regional Trial Courts in the
exercise of their original jurisdiction; and
(c) Tax collection cases decided by the Regional Trial Courts in
the exercise of their original jurisdiction involving final and
executory assessments for taxes, fees, charges and
penalties, where the principal amount of taxes and penalties
claimed is less than one million pesos;
(2) Decisions, resolutions or orders of the Regional Trial Courts in
local tax cases and in tax collection cases decided or resolved by
them in the exercise of their APPELLATE jurisdiction;
(3) Decisions, resolutions or orders on motions for reconsideration or
new trial of the Court in Division in the exercise of its exclusive
original jurisdiction over tax collection cases;
(4) Decisions of the Central Board of Assessment Appeals (CBAA) in
the exercise of its appellate jurisdiction over cases involving the
assessment and taxation of real property originally decided by the
provincial or city board of assessment appeals;
Criminal cases [Sec. 7, RA 1125 as amended]
Exclusive Original Jurisdiction
All criminal offenses arising from violations of the National Internal
Revenue Code or Tariff and Customs Code and other laws
administered by the Bureau of Internal Revenue or the Bureau of
Customs. Principal amount of taxes and fees, exclusive of charges and
penalties, claimed is more than or equal to One million pesos
(P1,000,000.00).
The filing of the criminal action being deemed to necessarily carry with
it the filing of the civil action, and no right to reserve the filling of such
civil action separately from the criminal action will be recognized.
Exclusive appellate jurisdiction in criminal cases
CTA Division
(1) Over appeals from the judgments, resolutions or orders of the
Regional Trial Courts in tax cases originally decided by them, in
their respected territorial jurisdiction.
(2) Over petitions for review of the judgments, resolutions or orders of
the Regional Trial Courts in the exercise of their appellate
jurisdiction over tax cases originally decided by the Metropolitan
Trial Courts, Municipal Trial Courts and Municipal Circuit Trial
Courts in their respective jurisdiction.
CTA En Banc
(1) Decisions, resolutions or orders on motions for reconsideration or
new trial of the Court in Division in the exercise of its exclusive
original jurisdiction over cases involving criminal offenses arising
from violations of the National Internal Revenue Code or the Tariff
and Customs Code and other laws administered by the Bureau of
Internal Revenue or Bureau of Customs;
(2) Decisions, resolutions or orders on motions for reconsideration or
new trial of the Court in Division in the exercise of its exclusive
appellate jurisdiction over criminal offenses mentioned in the
preceding subparagraph; and
(3) Decisions, resolutions or orders of the Regional trial Courts in the
exercise of their appellate jurisdiction over criminal offenses
mentioned in subparagraph (f).
Section 4. Power of the Commissioner to Interpret Tax Laws
and to Decide Tax Cases.
(1) POWER TO INTERPRET
 The Commissioner has the exclusive and original
jurisdiction to interpret the provisions of NIRC.
 subject to review by the Secretary of Finance
(2) POWER TO DECIDE TAX CASES
 The power to decide the following disputes are vested
in the Commissioner:
i. assessments,
ii. refunds of internal revenue taxes,
iii. fees or other charges,
iv. penalties imposed in relation thereto, or
v. other matters arising under this Code or other laws
or portions thereof administered by the BIR
 subject to exclusive appellate jurisdiction of the Court of
Tax Appeals
Section 5. Power of the Commissioner to Obtain Information,
and to Summon, Examine, and Take Testimony of Persons.
(A) To examine any book, paper, record, or other data which
may be relevant or material to such inquiry;
(B) To obtain information from any person other than the
person whose internal revenue tax liability is subject to audit
or investigation [Third-Party Information Rule]
(C) To summon the following to appear before the
Commissioner or his duly authorized representative at a time
and place specified in the summons and to produce such
books, papers, records, or other data, and to give testimony;
1. person liable for tax or required to file a return, or
2. any officer or employee of such person, or
3. any person having possession, custody, or care of the
books of accounts and other accounting records
containing entries relating to the business of the person
liable for tax, or
4. any other person
(D) To take such testimony of the person concerned, under
oath, as may be relevant or material to such inquiry; and
(E) To make a canvass and inquire who may be liable to pay
any internal revenue tax, and all persons owning or having
the care, management or possession of any object with
respect to which a tax is imposed.
Section 6. Power of the Commissioner to Make Assessments
and Prescribe Additional Requirements for Tax
Administration and Enforcement.
(A) Examination of Return and Determination of Tax Due.
Q: Will the failure to file return prevent the CIR from
authorizing the examination of a taxpayer?
A: NO. Failure to file a return shall not prevent the
Commissioner from authorizing the examination of any
taxpayer. [Par. 1, Section 6(A)]
Q: When shall deficiency tax so assessed shall be paid?
A: The tax or any deficiency tax so assessed shall be paid
upon (1) notice and (2) demand from the Commissioner
or from his duly authorized representative. [Par. 2,
Section 6(A)]
Q: May the return, statement or declaration filed in any
office authorized to receive the same be withdrawn?
A: NO. The Return, Statement or declaration filed in any
office authorized to receive the same shall not be
withdrawn, HOWEVER, the same may be modified,
changed, or amended within three (3) years from the
date of filing, provided that no notice for audit or
investigation of such return, statement or declaration
has in the meantime been actually served upon the
taxpayer. [Par. 3, Section 6(A)]
Q: May the statement or declaration filed in any office
authorized to receive the same be modified, changed,
or amended?
A: YES. The Statement or declaration filed in any office
authorized to receive the same may be modified,
changed, or amended provided that (1) it is made
within three (3) years from the date of filing, and (2) no
notice for audit or investigation of such return,
statement or declaration has been actually served upon
the taxpayer. [Par. 3, Section 6(A)]
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(B) Assess the proper tax on the best evidence obtainable
in case a person (i) fails to file a required return or other
document at the time prescribed by law, or (ii) willfully
or otherwise files a false or fraudulent return or other
document
“BEST EVIDENCE OBTAINABLE” RULE - In case a
person fails to file a required return or other document at the
time prescribed by law, or willfully or otherwise files a false
or fraudulent return or other document, the Commissioner
shall make or amend the return from (1) his own knowledge,
and (2) such information as he can obtain through testimony
or otherwise, which shall be prima facie correct and
sufficient for all legal purposes.
(C) Conduct (i) Inventory-taking, (ii) Surveillance and to (iii)
Prescribe Presumptive Gross Sales and Receipts.
The Commissioner may, at any time during the taxable year,
order:
i. Order Inventory-taking of goods of any taxpayer as a
basis for determining his internal revenue tax liabilities,
or
ii. Order Surveillance of a place the business operations
of any person, natural or juridical, under observation if
there is reason to believe that such person is not
declaring his correct income, sales or receipts for
internal revenue tax purposes.
iii. Prescribe Presumptive Gross Sales and Receipts if:
(1) a person has failed to issue receipts and invoices
or
(2) when there is reason to believe that the books of
accounts or other records do not correctly reflect
the declarations made
 “Presumptive Gross Sales and Receipts” – for
the for purposes of determining the internal
revenue tax liabilities of a person, the
Commissioner shall prescribe a minimum amount
of such gross receipts, sales and taxable base
after taking into account the sales, receipts,
income or other taxable base of other persons
engaged in similar businesses under similar
situations or circumstances or after considering
other relevant information, in which such amount
so prescribed shall be prima facie correct.
(D) Terminate Taxable Period.
Q: When may the Commissioner declare the tax period of
such taxpayer terminated?
A: The Commissioner may the Commissioner declare the
tax period of such taxpayer terminated When it shall
come to the knowledge of the Commissioner that a
taxpayer is:
(1) Retiring from business
(2) Intending to
i. leave the Philippines or
ii. remove his property therefrom or
iii. hide or conceal his property, or is
(3) Performing any act tending to obstruct the
proceedings for the collection of the tax for the
past or current quarter or year or to render the
same totally or partly ineffective unless such
proceedings are begun immediately.
Q: What shall the commissioner do upon declaration that
the tax period of such taxpayer terminated?
A: The Commissioner shall send the taxpayer (1) a notice
of decision to terminate the tax period; (2) request for
the immediate payment of the tax for the period so
declared terminated and the tax for the preceding year
or quarter, or such portion thereof as may be unpaid.
Q: What is the effect of the declaration that the tax period
is terminated?
A: Said taxes shall be due and payable immediately and
shall be subject to all the penalties hereafter prescribed,
unless paid within the time fixed in the demand made
by the Commissioner.
(E) Prescribe Real Property Values.
The Commissioner is authorized to:
(1) divide the Philippines into different zones or areas, and
(2) determine the fair market value of real properties
located in each zone or area.
The value of the property shall be, whichever is the higher:
i. The fair market value as determined by the
Commissioner; or
ii. The fair market value as shown in the schedule of
values of the Provincial and City Assessors.
(F) Inquire into Bank Deposit Accounts.
Q: Is the Commissioner authorized to inquire into bank
deposits?
A: YES. Under Section 6(F), the Commissioner is
authorized to inquire into the bank deposits and other
related information held by financial institutions of:
1. A decedent to determine his gross estate; and
2. Any taxpayer who has filed an application for
compromise of his tax liability by reason of
financial incapacity to pay his tax liability.
[In this case, his application shall not be
considered unless and until he waives in writing
his privilege (confidentiality of bank accounts), and
such waiver shall constitute the authority of the
Commissioner to inquire into the bank deposits of
the taxpayer.]
3. Upon the request from a foreign tax authority
pursuant to an international convention or
agreement on tax matters to which the Philippines
is a signatory or a party of.
[The information obtained from the banks and
other financial institutions may be used by the
Bureau of Internal Revenue for tax assessment,
verification, audit and enforcement purposes.]
[In case of a request from a foreign tax authority
for tax information held by banks and financial
institutions, the exchange of information shall be
done in a secure manner to ensure
confidentiality thereof.]
"foreign tax authority," shall refer to the tax
authority or tax administration of the requesting
State under the tax treaty or convention to which
the Philippines is a signatory or a party of.
(G) Accredit and Register Tax Agents.
Individuals and general professional partnerships and their
representatives who prepare and file tax returns, statements,
reports, protests, and other papers with or who appear
before the Bureau in behalf of the taxpayers shall be
accredited and registered by the Commissioner based on
their
i. professional competence,
ii. integrity and
iii. moral fitness.
[In case of denial of accreditation and registration, the
Individuals and general professional partnerships and their
representatives may appeal to the Secretary of Finance, who
shall rule on the appeal within sixty (60) days from receipt of
such appeal. Failure of the Secretary of Finance to rule on
the Appeal within the prescribed period shall be deemed as
approval of the application for accreditation of the appellant.]
5

(H) Prescribe Additional Procedural or Documentary
Requirements.
Section 7. Authority of the Commissioner to Delegate Power.
GR: The Commissioner may delegate the powers vested in him to
subordinate officials with the rank equivalent to a division
chief or higher.
EX: That the following powers of the Commissioner shall not be
delegated:
(a) Power to recommend the promulgation of rules and
regulations by the Secretary of Finance;
(b) Power to issue rulings of first impression or to reverse,
revoke or modify any existing ruling of the Bureau;
(c) Power to compromise or abate any tax liability:
Upon recommendation of the Commissioner, the
Secretary of finance may promulgate rules and
regulations on the compromise by regional evaluation
board (which shall be composed of the Regional
Director as Chairman, the Assistant Regional Director,
the heads of the Legal, Assessment and Collection
Divisions and the Revenue District Officer having
jurisdiction over the taxpayer, as members) of the
following:
1. assessments issued by the regional offices
involving basic deficiency taxes of Five hundred
thousand pesos (P500,000) or less, and
2. minor criminal violations discovered by regional
and district officials,
(d) Power to assign or reassign internal revenue officers to
establishments where articles subject to excise tax are
produced or kept.
Section 203. Period of Limitation Upon Assessment and
Collection.
STATUTE OF LIMITATION
 GENERAL RULE: Assessment shall be made within three
(3) years after the last day prescribed by law for the filing of
the return;
 in case the return is filed beyond the period prescribed by
law, the three (3)-year period shall be counted from the day
the return was filed;
 a return filed before the last day prescribed by law for the
filing thereof shall be considered as filed on such last day.
 EFFECT: no proceeding in court without assessment for the
collection of such taxes shall be begun after the expiration of
such period.
PERIOD OF ASSESSMENT
ORDINARY  3 years after the last day prescribed by
(Sec. 203) law for the filing of the return;
 In the case of a false or fraudulent
EXTRAORDINARY return with intent to evade tax or of
(Sec. 222) failure to file a return, within ten (10)
years after the discovery of the falsity,
fraud or omission.
 Upon agreement in writing of both the
Commissioner and the taxpayer,
within the period agreed upon
 The Commissioner is (i) prohibited
from making the assessment or (ii)
beginning distraint or levy or a
SUSPENSION OF proceeding in court and (iii) for sixty
STATUTE OF (60) days thereafter;
LIMITATION  Taxpayer requests for a
(Sec. 223) reinvestigation which is granted by
the Commissioner;
 Taxpayer cannot be located in the
address given by him in the return filed
upon which a tax is being assessed or
collected. If the taxpayer informs the
Commissioner of any change in
address, the running of the Statute of
Limitations will not be suspended;
 The warrant of distraint or levy is duly
served upon the taxpayer, his
authorized representative, or a
member of his household with
sufficient discretion, and no property
could be located; and when the
taxpayer is out of the Philippines.
Section 222. Exceptions as to Period of Limitation of
Assessment and Collection of Taxes.
EXCEPTIONS AS TO PERIOD OF LIMITATION OF
ASSESSMENT AND COLLECTION OF TAXES.
1. In the case of a false or fraudulent return with intent to
evade tax or of failure to file a return.
EFFECT: At any time within ten (10) years after the
discovery of the falsity, fraud or omission:
(1) the tax may be assessed, or
(2) a proceeding in court for the collection of such tax may
be filed without assessment
That the fact of fraud shall be judicially taken cognizance of
in the civil or criminal action for the collection thereof, in case
a fraud assessment has become final and executory.
Any internal revenue tax which has been assessed within
the period of limitation as prescribed in the case of a false or
fraudulent return with intent to evade tax or of failure to
file a return may be collected by distraint or levy or by a
proceeding in court within five (5) years following the
assessment of the tax.
2. If before the expiration of the time prescribed for the
assessment of the tax, both the Commissioner and the
taxpayer have agreed in writing to its assessment after
such time, the tax may be assessed within the period agreed
upon.
Requisites under no. 2:
(1) both the Commissioner and the taxpayer have agreed
in writing on assessment of tax beyond the prescribed
period for the assessment
(2) the agreement is made before the expiration of the time
prescribed for the assessment of the tax (before
expiration of 3 years)
The period so agreed upon may be extended by subsequent
written agreement made before the expiration of the period
previously agreed upon.
Any internal revenue tax, which has been assessed within
the period agreed upon hereinabove, may be collected by
distraint or levy or by a proceeding in court before the
expiration of the five (5)-year period.
NOTE: nothing in the provisions above shall be construed to
authorize the examination and investigation or inquiry into
any tax return filed in accordance with any tax amnesty law
or decree.
6
Section 223. Suspension of Running of Statute of
Limitations.
1. The Commissioner is (i) prohibited from making the
assessment or (ii) beginning distraint or levy or a proceeding
in court and (iii) for sixty (60) days thereafter;
2. Taxpayer requests for a reinvestigation which is granted
by the Commissioner;
3. Taxpayer cannot be located in the address given by him in
the return filed upon which a tax is being assessed or
collected. If the taxpayer informs the Commissioner of any
change in address, the running of the Statute of Limitations
will not be suspended;
4. The warrant of distraint or levy is duly served upon the
taxpayer, his authorized representative, or a member of his
household with sufficient discretion, and no property could
be located; and when the taxpayer is out of the Philippines.
Section 228. Protesting of Assessment.
REQUISITES OF A VALID ASSESSMENT
1. The taxpayers shall be informed/notified in writing of the law
and the facts on which the assessment is made
2. An assessment contains not only a computation of tax
liabilities, but also a demand for payment within a prescribed
period
3. An assessment must be served on and received by the
taxpayer
NOTES:
 Service of preliminary assessment notice by the
Commissioner or his duly authorized representative to the
taxpayer in case he finds that proper taxes should be
assessed.
EXCEPTION TO PRELIMINARY ASSESSMENT NOTICE:
(a) When the finding for any deficiency tax is the result of
mathematical error in the computation of the tax as
appearing on the face of the return; or
(b) When a discrepancy has been determined between
the tax withheld and the amount actually remitted by
the withholding agent; or
(c) When a taxpayer who opted to claim a refund or tax
credit of excess creditable withholding tax for a taxable
period was determined to have carried over and
automatically applied the same amount claimed
against the estimated tax liabilities for the taxable
quarter or quarters of the succeeding taxable year; or
(d) When the excise tax due on excisable articles has not
been paid; or
(e) When the article locally purchased or imported by an
exempt person, such as, but not limited to, vehicles,
capital equipment, machineries and spare parts, has
been sold, traded or transferred to non-exempt
persons.
 Service of the Assessment Notice where the taxpayer shall
be informed in writing of the law and the facts on which the
assessment is made
 Within a period to be prescribed by implementing rules and
regulations, the taxpayer shall be required to respond to said
notice.
 If the taxpayer fails to respond, the Commissioner or his duly
authorized representative shall issue an assessment based
on his findings.
 Such assessment may be protested administratively by
filing a request for reconsideration or reinvestigation
within thirty (30) days from receipt of the assessment in
such form and manner as may be prescribed by
implementing rules and regulations.
 Within sixty (60) days from filing of the protest, all relevant
supporting documents shall have been submitted; otherwise,
the assessment shall become final.
 If the protest is denied in whole or in part, or is not acted
upon within one hundred eighty (180) days from
submission of documents, the taxpayer adversely affected
by the decision or inaction may appeal to the Court of Tax
Appeals within thirty (30) days from receipt of the said
decision, or from the lapse of one hundred eighty (180)-day
period; otherwise, the decision shall become final, executory
and demandable.
Section 232. Keeping of Books of Accounts.
Corporations, Companies, Partnerships or Persons Required
to Keep Books of Accounts.
Journal and a ledger All corporations, companies,
or their equivalents partnerships or persons required by law
to pay internal revenue taxes
Simplified set of That those whose quarterly sales,
bookkeeping records earnings, receipts, or output do not
exceed P50,000 (must be duly
authorized by the Secretary of Finance)
Books of accounts gross quarterly sales, earnings, receipts
audited and or output exceed P150,000.
examined yearly by
independent CPA
'Independent Certified Public Accountant' - an accountant who
possesses the independence as defined in the rules and
regulations of the Board of Accountancy.
Section 266. Failure to Obey Summons
Any person duly summoned to appear to FINE: not less
testify, or to appear and produce books of than 5,000; not
accounts, records, memoranda or other more than 10,000
papers, or to furnish information as required
under the pertinent provisions of this Code,
neglects to appear or to produce such IMPRISONMENT:
books of accounts, records, memoranda or not less than 1
other papers, or to furnish such year; not more
information, shall, upon conviction, be than 2 years.
punished by:
REVENUE REGULATIONS NO. 12-99 issued September 14,
1999
This RR Implements the provisions of the Tax Code of 1997
relative to the rules on assessment of national internal revenue
taxes, fees and charges, as well as provides the rules for the
extra-judicial settlement of a taxpayer's criminal violation of the
said Code or any of its implementing Regulations through
payment of a suggested compromise penalty. As a general
principle, in case the tax due from the taxpayer is paid on a partial
or installment basis, the interest on the deficiency tax or on the
delinquency tax liability of the taxpayer will be imposed from due
date of the tax until full payment thereof. The interest will be
computed based on the diminishing balance of the tax, inclusive
of interests.
NB: RR 12-99 is amended by RR 18-2013. Under RR No. 18-
2013, the following are the New Tax Assessment Rules:
1. PAN instead of Informal Conference
In RR 12-99, the findings and alleged deficiency taxes
from the tax examination or tax assessment in the
Philippines shall be contained in a Notice for Informal
Conference or Notice of Preliminary findings informing the
taxpayer of the findings and giving a period ranging from five
(5) to fifteen (15) days to respond either through an informal
discussion with the handling officer or a position paper to the
Notice for Informal Conference.
7

Under the new rules, the issuance of Notice for Informal
Conference has been deleted and a Preliminary Assessment
Notice (PAN) shall be issued instead of the Notice for
Informal Conference. The tax payer may pay the deficiency
taxes in the PAN or file a protest within fifteen (15) days
stating its disagreement to the findings with the basis of such
protest, facts and the law.
2. Issuance of FAN/FLD within 15 days from PAN
Upon issuance of the Preliminary Assessment Notice
(PAN) in the Philippines, the BIR will issue a Final
Assessment Notice – Formal Letter of Demand (FAN-FLD)
within fifteen (15) days thereof. The wording of RR No. 18-
2013 is quite silent as to the impact of the protest to the PAN
timely filed within fifteen (15) days from receipt thereof.
The taxpayer may pay the deficiency taxes in the Final
Assessment Notice – Formal Letter of Demand (FAN-FLD)
in Philippines issued within the prescriptive period of the BIR
to issue (either under the three-year period, or ten-year
period), or file the protest to the FAN-FLD with factual and
legal basis within thirty (30) days from receipt thereof, then,
submit complete supporting documents within sixty (60) days
from filing the protest.
3. Final and executor of undisputed findings
In filing the protest, the taxpayer should dispute all the
alleged findings on deficiency internal revenue taxes and
any item stated in the assessment that has not been
disputed will become final and executory where the taxpayer
will be required to pay upon filing the protest. Protests filed
without such payment on undisputed findings will not be
accepted by the BIR.
4. Administrative appeal
Tax assessment process would be undertaken by the
commissioner or by the authorized representative such as
Regional Directors. In the event of the following
circumstance, the taxpayer has the option to elevate the tax
assessment case in the Philippines with the Court of Tax
Appeals (CTA) via Petition For Review within thirty (30)
days:
 Denial of the that the protest to the formal assessment
notice – formal letter of demand; or
 Inaction on the protest within one hundred eighty (180)
days
Under the new rules on tax assessment in the
Philippines under RR No. 18-2013, if such denial or inaction
has been made by the Commissioner’s authorized
representative, then, the taxpayer has the option to elevate
the same with the Commissioner of Internal Revenue (CIR)
instead of having the same with the CTA which would
require a legal counsel to file, payment of filing fees, and
other technical requirements.
5. Service of Tax Assessment Notices to taxpayers
Under RR No. 12-99, service of notices such as PAN
and FAN-FLD shall be made either by personal delivery or
by registered mail only. In the new rules of tax assessment
in the Philippines under RR No. 18-2013, the following new
modes of serving notices has been introduced that is more
aligned with the Rules of Court of the Supreme Court of the
Philippines in legal proceedings in the Philippines:
1. Service to taxpayer in its business address, residence,
or wherever it may be found under personal delivery
2. Service to professional courier under service by mail
3. Service to the office in charge of the office, or to a legal
resident at residence, or with the barangay officials
under substituted service
4. Service to tax agent
6. Imposition of Delinquency interest
Delinquency interest is the interest being imposed upon
a taxpayer as an addition to the tax from the time required to
be paid as stated in the FAN-FLD up to such time of full
payment. RR No. 18-2013 has expressly provided that the
delinquency interest should be imposed. The base for the
computation of such delinquency interest includes the
deficiency interest covering the interest from the time
required by law to be filed or from late filing until the date
required to be paid stated in the FAN-FLD. In short, the
deficiency interest will generate delinquency interest or
interest will earn another interest similar in concept to a
compounded interest computation in finance practice.
Clarifying Certain Issues Relative to Due Process
Requirement in the Issuance of a Deficiency Tax Assessment
Pursuant to Revenue Regulations (RR) No. 12-99, as
amended by RR 18-2013
Tax Alert No. 9 [Revenue Memorandum Circular No. 11-2014
dated 18 February 2014]
The Commissioner of Internal Revenue has issued Revenue
Memorandum Circular No. 11-2014 (“RMC”) clarifying certain
issues relative to the amendments introduced by RR 18-2013 on
the issuance of a deficiency tax assessment.
1. The term “duly authorized representative” of the
Commissioner of Internal Revenue (CIR) who may issue the
Preliminary Assessment Notice (PAN), Formal Letter of
Demand/Final Assessment Notice (FLD/FAN) and Final
Decision on Disputed Assessment (FDDA) refers to
Revenue Regional Directors, Assistant Commissioner-Large
Taxpayers Service, and Assistant Commissioner-
Enforcement and Advocacy Service.
2. Taxpayers shall submit their responses to the PAN and
protests (requests for reconsideration / reinvestigation) to the
FLD/FAN with the duly authorized representative of the CIR
who signed the PAN and FLD/FAN in accordance with RMC
No. 39-2013.
3. Protests in the nature of requests for reconsideration of
taxpayers elevated to the CIR arising from inactions or
adverse decisions of the “duly authorized representatives”
shall be filed with the Office of the CIR.
4. Prior to the issuance of the PAN, the taxpayer may be
allowed to make voluntary payments of probable deficiency
taxes and penalties.
5. An FLD/FAN issued reiterating the immediate payment of
deficiency taxes and penalties previously made in the PAN is
a denial of the response to the PAN. A final demand letter for
payment of delinquent taxes may be considered a decision
on a disputed assessment.
6. An FLD/FAN issued beyond 15 days from filing/submission
of the taxpayer’s response to the PAN shall be valid,
provided the same is issued within the period of limitation to
assess taxes. However, non-observance of the 15-day
period shall constitute an administrative infraction and
revenue officers who caused the delay shall be subject to
administrative sanctions.
7. The failure of the taxpayer who requested for a
reinvestigation to submit all relevant supporting documents
within the 60- day period shall render the FLD/FAN “final” by
operation of law.
8. The notice (PAN/FLD/FAN/FDDA) shall first be served to the
taxpayer’s registered address before the same may be
served to the taxpayer’s known address, or in the alternative,
to the taxpayer’s registered address and known address
simultaneously.
PART I
REMEDIES UNDER THE NIRC
8
I. Assessment of Internal Revenue Taxes computation of legal period. Accor-dingly, a year
shall be understood to be 12 calendar months; a
A. Definition/Nature/effect/Basis month of 30 days, unless it refers to a specific
calendar month
1. Tax Audit Process
e. Rule if wrong returns/amended return
6.
2. Letter of Authority/Audit Notice/Tax Verification Notice CIR vs. Ayala Securities (GR No. L-29485, dated
 Revenue Audit Memorandum Order No. 1-00 November 21, 1980)
7.
 Revenue Memorandum Order No. 44-2010 dated May Butuan Sawmill, Inc. vs. CTA (GR No. L-20601,
12, 2010 February 28, 1966)
8.
 Revenue Memorandum Order No. 69-2010 dated CIR vs. Phoenix (GR No. L-19727, May 20, 1965)
9.
August 11, 2010 CIR vs. Gonzales (18 SCRA 757)
1.
CIR vs. Sony Phils, Inc. G.R. No. 178697,
November 17, 2010 2. Suspension of prescriptive periods/ exceptions
 Secs. 203, 222 and 223 NIRC
3. Tax Assessment  Revenue Memorandum Order No. 20-90, as amended
by Revenue Delegation Authority Order No. 05-01
4. Pre-assessment Notice (PAN)/when not required dated August 2, 2001 (Execution of waiver of statute of
limitations)
5. Notice of Assessment or Formal Assessment Notice (FAN)
Cases on Sec. 222 and 223:
10.
6. Deficiency vs. Delinquency Republic vs. Ret (GR No. L-13754 dated March
31, 1962)
11.
7. Jeopardy Assessment BPI vs. CIR (GR No. 139736, October 17, 2005)
 Sec. 3 (1)(a) of RR No. 30-02 dated December 16,
12.
Continental Micronesia, Inc. – Phil. Branch vs. CIR
2002 (CTA Case No. 6191, March 22, 2006)
13.
8. Power of the Commissioner to assess deficiency tax / best CIR vs. Kudos Metal (GR No. 178087, May 5,
evidence obtainable 2010)
 Revenue Memorandum Circular No. 23-00 dated  Waiver must be in the form identified in RMO
November 27, 2000 20-90.
2.
Bonifacio SyPo vs. CTA (164 SCRA 524)  Expiry date of period agreed upon is
3.
Fitness By Design, Inc. vs. CIR (GR No. 177982 indicated in the waiver.
dated October 17, 2008)  Waiver form requires statement of the kind of
tax and amount of tax due; if not indicated in
9. Rule on Amendment of Returns the waiver, there is no agreement.
 Waiver is signed by taxpayer or his
10. Power to issue Subpoena Duces Tecum authorized representative. In case of
 Revenue Memorandum Order No. 002-08 dated corporation, waiver is signed by any
January 8, 2008 responsible official.
 Revenue Memorandum Order No. 045-10 dated May  CIR or his authorized representative shall
12, 2010 sign waiver indicating that BIR has accepted
 Revenue Memorandum Order No. 088-10 dated and agreed to the waiver.
December 22, 2010  Date of acceptance by BIR is indicated.
 Date of execution and acceptance by BIR
B. Period to assess deficiency tax should be before expiration of prescriptive
period.
1. Prescription  Waiver is executed in 3 copies; second copy
is for taxpayer. Fact of receipt by the
a. Rationale/Construction/Interpretation taxpayer should be indicated in the original
4.
Republic vs. Ablaza (108 Phil 1105) copy
14.
b. Ordinary – 3 years from date of filing (Sec. 203, NIRC) Aznar vs. CTA (58 SCRA 519)
15.
Republic vs. Ker (18 SCRA 208)
16.
c. Extraordinary – 10 years from discovery of fraud, falsity, or CIR vs. Suyoc (104 Phil. 819)
17.
omission (see also Sec. 248(B) CIR vs. Phil Global Communication (GR No.
167146, October 31, 2006)
d. Counting of periods (Art. 13 of NCC vs. Sec. 31 of Revised
Admin Code) C. Requisites of a valid assessment
5.
CIR vs. Primetown Property Group (GR No.  Sec. 3 of RR No. 12-99
162155, August 28, 2007)
1. Due Process
18.
TAXABLE YEAR Collector vs. Benipayo (4 SCRA 182)
19.
• Normal year (365 days) CIR vs. Enron Subic (GR No. 166387 dated
• Leap year (366 days) January 19, 2009)
20.
A Brown Co., Inc. vs. CIR (CTA Case No. 6357,
If there is a leap year within the prescriptive period June 7, 2004)
21.
(3 years from filing of return) to assess, a year CIR vs. Menguito (GR No. 167550, September 17,
shall be deemed to have 365 days only 2008)
22.
(NAMARCO v. Tecson, 29 SCRA 70). Thus, CIR vs. Metro Star Superama, Inc., G.R. No.
assessment issued on April 15 of the third year 185371, December 8, 2010
from filing of return (which is the 1,096th day) shall
be treated as invalid due to prescription. 2. Power of CIR to issue assessments
23.
Meralco vs. Savellano (117 SCRA 804)
24.
EO 292 (Administrative Code of 1987), being the Maceda vs. Macaraig (197 SCRA 771)
more recent law than Civil Code, governs the
3. Modes of Service of Assessments
9
 Aug 31, 2005 -- Letter of Reconsideration of the
4. When Assessment made denial of administrative protest was filed by
25.
Nava vs. CIR (GR No. L-19470, January 30, 1965) petitioner with CIR.
26.
Barcelon, Roxas Securities vs. CIR, (GR No.
157064, dated August 7, 2006) Sept 6, 2005 -- BIR issued Preliminary Collection
Letter.
II. Protesting an assessment/ Remedy BEFORE payment
Oct 20, 2005 – Petitioner appealed to CTA, but it
A. How to protest or dispute an assessment administratively dismissed petitioner for being filed out of time.
 Sec. 228, NIRC Petitioner filed Motion for Reconsideration which
 Sec. 3.1.5, RR No. 12-99 was denied by CTA. Resolution was received on
 Oct 31, 2006.
1. When to file protest – within 30 days from receipt of the FAN
Nov 21, 2006, petitioner appealed to CTA en
2. Where to file banc, which denied it.

3. Reinvestigation vs. Reconsideration SC ruled that since the petition for review was filed
27.
BPI vs. CIR (GR No. 139736, October 17, 2005) before the CTA only on Oct 20, 2005, it was filed
out of time. An MR at the BIR level does not toll
4. Other requirements the 30-day period to appeal to CTA.
37.
a. Submission of relevant documents Allied Banking Corporation vs. CIR (GR No.
175097 dated February 5, 2010)
b. Payment of protest not required under the NIRC
Apr 30, 2004 -- BIR issued PAN.
5. Effects of filing of the protest
July 16, 2004 – BIR wrote Formal Letter of
6. Effects of failure to file protest / failure to submit relevant Demand with Assessment Notices to ABC, which
documents reads: “It is requested that the above deficiency
28.
Marcos II vs. CA (GR No. 120880 dated June 5, tax be paid immediately upon receipt hereof,
1997) inclusive of penalties incident to delinquency. This
29.
Republic vs. Ker (18 SCRA 208) is our final decision based on investigation. If you
30.
Prulife of UK Insurance Corp vs. CIR (CTA Case disagree, you may appeal the final decision within
No. 6774 dated September 11, 2007) thirty days from receipt hereof, otherwise said
31.
ABN-AMRO Savings Bank Corp vs. CIR (CTA assessment shall become final, executory and
Case No. 7089 dated September 10, 2008) demandable.”
32.
CIR vs. First Express Pawnshop (GR Nos. CTA has exclusive appellate jurisdiction to review
172045-06 dated June 16, 2009) by appeal “decisions of CIR in cases involving
disputed assessments.” (RA 9282)
B. Commissioner of Internal Revenue renders a decision on the
disputed assessment The word “decisions” means decisions of the CIR
on the protest of taxpayer against the assessment.
C. Remedy of the taxpayer Strictly speaking, the dismissal of the petition for
 Sec. 3.5.1, RR No. 12-99 review by CTA was proper. However, a careful
 Sec. 228 of the NIRC reading of the demand letter and assessment
 RA No. 9282, as amended by RA No. 9503 notices leads us to agree with petitioner. The
 Revised Rules of the CTA, AM No. 05-11-07-CTA statement of the CIR led the petitioner to conclude
dated November 22, 2005, as amended on September that only a final judicial ruling in her favor would be
16, 2008 accepted by the BIR.

1. If protest is expressly denied Although there was no direct reference to

petitioner to bring the matter directly to the CTA, it
2. CIR’s actions equivalent to denial of protest cannot be denied that the word “appeal” refers to
filing of petition for review with CTA. As aptly
3. CIR fails to act on the protest within 180 days from pointed out by petitioner, the terms “protest,”
submission of relevant documents reinvestigation” and “reconsideration” refer to
33.
Lascona Land Co. Inc. vs. CIR (CTA Case No. administrative remedies before the CIR.
5557, January 4, 2000) 38.
34.
RCBC vs. CIR (GR No. 168498, April 24, 2007) Republic vs. Lim Tian Teng Sons (GR No. L-
4. Remedy in case CIR files a case or issues a warrant of 21731 dated March 31, 1966)
distraint or levy
BIR is not required to rule first on taxpayer’s
5. Effect of failure to appeal on time request for reinvestigation before initiation of
35.
CIR vs. Concepcion (22 SCRA 1058) judicial action to collect; decision of CIR may be
inferred from his referral of case to the Solicitor
6. Matter appealable to the CTA General
39.
7. Appeal to the CTA En Banc / Supreme Court Advertising Associates vs. CA (133 SCRA 765)
40.
36.
Fishwealth Canning Corp. vs. CIR (GR No. CIR vs. Algue (158 SCRA 9)
41.
179343 dated January 21, 2010) Yabes vs. Flojo (GR No. L-46954, July 20, 1982)
42.
CIR vs. Union Shipping (185 SCRA 547)
43.
Petitioner’s administrative protest was denied by CIR vs. Isabela Cultural Corp. (GR No. 135210,
Final Decision on Disputed Assessment dated Aug July 11, 2001)
2, 2005, which was received by petitioner on Aug
4, 2005. D. Non-retroactivity of rulings (Sec. 246, NIRC)

1. BIR Rulings
10
2. Rulings of first impression (Sec. 7(B) NIRC) 5. Surcharge: 25% or 50%
 Sec. 248, NIRC
59.
3. Review/Appeal to Sec. Of Finance (Sec. 4, NIRC) Castro vs. CIR (GR No. L-12174, April 26, 1962)
44.
CIR vs. Phil. Healthcare Providers (GR No.
168129, April 24, 2007) a. False vs. Fraudulent return
45.
Phil. Bank of Communications vs. CIR (GR No.
112024, January 28, 1999) b. Fraud Assessment
46.
CIR vs. CA (GR No. 117982, February 6, 1997)
[read also concurring opinion of Justice Vitug] c. Mandatory imposition of penalties
47. 60.
CIR vs. Burmeister and Wain GR No. 153205 Phil. Refining Co. vs. CA (GR No. 118794 dated
dated Jaunary22, 2007 May 8, 1996)

III. Remedies Available to the Government d. When penalties may be waived

61.
Lhuillier Pawnshop vs. CIR (GR No. 166786 dated
A. Prescriptive period to collect September 11, 2006)
 Sec. 222, NIRC
48.
Republic vs. Hizon (GR No. 130430. December e. Rule on prima facie fraud
13, 1997)  Sec. 248 (B), NIRC
62.
49.
CIR vs. Hambrecht & Quist Philippines, Inc. (GR Aznar vs.CIR (58 SCRA 519)
63.
No. 169225 November 17, 2010) Javier vs. CIR (199 SCRA 824)

B. Administrative remedies / Summary Remedies B. Crimes / Offenses / Penalties / Forfeitures

 Secs. 205-217  Secs. 220-221, 224-226, NIRC
 Secs. 253-281, NIRC
1. Distraint of personal property  Revenue Memorandum Circular No. 101-90 dated
 Secs. 205-207, 217, 208-209, 210, 212, NIRC November 26, 1990
 Revenue Memorandum Circular No. 5-01 dated
February 19, 2001 1. Precondition before a criminal case may be filed
64.
2. Levy of Real Property Ungab vs. Cusi (97 SCRA 877)
 Secs. 205-207, 217, 208-209, 213-214, NIRC
FILING OF CRIMINAL ACTION DURING PENDENCY
3. Forfeiture OF PROTEST
 Sec. 215, NIRC  During the investigation, the BIR discovered the
50.
Castro vs. CIR (GR No. L-12174, April 26, 1962) non-declaration of income from sales of banana
saplings, which fact was known to the taxpayer.
4. Tax lien Without issuing an assessment and during the
 Sec. 219, NIRC pendency of the examination of the tax liability,
51.
Republic vs. Enriquez (166 SCRA 608) CIR filed a criminal action with the DOJ.
52.
CIR vs. NLRC (238 SCRA 42)  Assessment is not necessary to criminal
53.
Hong Kong Shanghai Bank vs. Rafferty (39 SCRA prosecution for willful attempt to evade tax.
145)  There is no precise computation and assessment
of tax before there can be criminal prosecution
5. No injunction to restrain collection of taxes  Crime is complete when violator has
 Sec. 218, NIRC knowingly and willfully filed fraudulent return
 Rule 10, Revised Rules of the CTA, AM No. 05-11-07- with intent to evade tax
CTA dated November 22, 2005, as amended on  What is involved here is not collection of taxes
September 16, 2008 where assessment may be reviewed by RTC, but
 Revenue Memorandum Order No. 42-10 dated May 4, criminal prosecution for violation of Tax Code
2010. (based on the 1977 Tax Code)
There can be no civil action to enforce collection
C. Judicial Remedies before assessment procedures have been
 Sec. 205 followed
 Secs. 220-221, NIRC 65.
54.
Republic vs. Hizon (GR No. 130430 December 13, CIR vs. CA (257 SCRA 200)
66.
1997) Adamson vs. CA (GR No. 120935, May 21, 2009)
55.
Mambulao Lumber vs. Republic (132 SCRA 1)
56.
Fernandez Hermanos vs. CIR (GR No. L-21551, 2. Compromise Penalty
September 30, 1969)
57.
PNOC vs. CIR (GR No. 109976, April 26, 2005) a. Nature and enforcement
67.
Revenue Memorandum Order No. 19-07 dated
August 8, 2007
IV. Statutory Offenses and Penalties 68.
CIR vs. Liangga Bay Logging (GR No. L-35266,
January 21, 1991)
A. Civil Penalties / Surcharge / Interest
 Secs. 247-251, NIRC 3. Elements of tax evasion
 RR No. 12-99 69.
CIR vs. The Estate of Benigno Toda, Jr. (GR No.
147188, September 14, 2004)
1. Applicable Interest Rate
4. Persons liable in case taxpayer is a juridical entity
2. How to compute interest
5. Payment of tax in criminal cases
3. Rules on interest  Sec. 253 (a), NIRC
58.
BPI vs. CIR (GR No. 137002, July 27, 2006)  Sec. 205 (b) last paragraph
70.
Republic vs. Patanao (GR No. L-22356, July 21,
4. Deficiency vs. Delinquency Tax 1967)
11
 71.
Castro vs. CIR (GR No. L-12174, April 26, 1962)  Secs.203 (C), 230, NIRC
 RR No. 05-00 dated July 19, 2000
6. Crimes under Secs. 254 and 255 a. Tax Credit, Tax Credit Certificate, Tax Debit Memo
b. Sources of Tax Credit
7. Civil liability in criminal cases c. Uses of Tax Credit
72.
People vs. Galero (CTA Criminal Case No. O-055. d. Sale / Assignment of Tax Credit
September 30, 2009) e. Validity, Conversion and Validation
73.
People vs. Mendez (CTA Criminal Case Nos. O- f. Forfeiture of Cash Refunds / Tax Credit
013 &O-015, January 5, 2011)
74.
People vs. Kintanar (CTA Criminal Case Nos. O- 10. Erroneously Refunded Tax
93.
031-& O-032 dated September 27, 2010) Guagua Electric Light vs. CIR (GR No. L-23611,
April 24, 1967)
8. Prescription of violations of the NIRC
75.
Lim vs. CA (190 SCRA 616) VI. Jurisdiction of the Court of Tax Appeals
 RA No. 9282, as amended by RA No. 9503
V. Claims for refund and credit of taxes/Remedy AFTER  Revised Rules of the CTA, AM No. 05-11-07-CTA
payment dated November 22, 2005, as amended on September
16, 2008
A. Who may file claim for refund/tax credit
1. Why was the CTA created?
94.
1. Basis of Tax Refunds Philippine Refining Co. vs. CA (256 SCRA 661
76.
CIR vs. Acesite Phils. (GR No. 147295, February
16, 2007) 2. Weight given to CTA decisions

2. Taxpayer/withholding agent 3. Composition of the Court (No. of Divisions and Justices, the
77.
CIR vs. Procter & Gamble (204 SCRA 377) CTA En Banc)

3. Requisites for a valid claim for refund 4. Reversal of Decisions of CTA Division
78.
Koppel (Phils) vs. CIR (GR No. L-10550,
September 19, 1961) 5. Jurisdiction of CTA Division
79.
CIR vs. Far East Bank GR No. 173854 March 15, a. Constitutionality of Regulations/Tax Laws
95.
2010 Asia International Auctioneers vs. Parayno GR No.
80.
CIR vs. Concepcion (22 SCRA 1058) 163445, December 18, 2007
81. 96.
CIR vs. CA (234 SCRA 348) British American Tobbaco vs. Camacho, GR No.
163583, August 20, 2008
4. Refunds where written claim is not needed b. Civil/Criminal Cases
 Sec. 204 (3), NIRC 97.
Adamson vs. CA (GR No. 120935, May 21, 2009)
 Sec. 229, NIRC 98.
CIR vs. Hambrecht & Quist Philippines, Inc., G.R.
82.
Vda de San Agustin vs. CIR, GR No. 138485, No. 169225, November 17, 2010
September 10, 2001
6. Jurisdiction of CTA EB
5. Refunds of Corporate taxpayers/Irrevocability Rule
 Sec. 76, NIRC 7. Suspension of Collection of Tax
83.
ACCRA Investments vs. CA (204 SCRA 957)
84.
CIR vs. TMX Sales (205 SCRA 184) 8. Appeal to the SC
85.
Systra Phils. Inc. vs. CIR (GR No. 176290,
September 21, 2007) VII. Abatement of Tax / Tax Compromise
86.
Sithe Phils. Holdings vs. CIR (CTA Case No.  Secs`. 8-04
6274, April 4, 2003)
87.
BPI-Family Savings Bank, Inc. vs. CA, CTA and A. Authority of CIR to abate taxes
CIR (GR No. 122480, April 12, 2000)
88.
Philam Asset Management, Inc. vs. CIR (GR Nos. 1. Grounds for abating taxes and penalties
156637/162004, December 14, 2005)
89.
CIR vs. BPI (GR No. 178490, July 7, 2009) 2. Conditions
90.
Asia World Properties vs. CIR (GR No. 171766,
July 29, 2010) B. Power to compromise
6. Rule in case of Merger/Corporate taxpayers contemplating 1. Cases that can be compromised
dissolution
 Sec. 52 (C), NIRC 2. Cases that cannot be compromised
91.
BPI vs. CIR (GR No. 144653, August 28, 2001)
3. Basis for acceptance of compromise settlement and rates
7. When 2 year period does not apply
92.
CIR vs. PNB (GR No. 161997, October 25, 2005)

8. Remedy of the taxpayer 1.

 Sec. 229, NIRC CIR VS. BASF COATING + INKS PHILS, INC., GR # 198677,
 RA No. 9282, as amended by RA No. 9503 NOVEMBER 26, 2014
 Revised Rules of the CTA, AM No. 05-11-07-CTA • The running of the period to assess and collect shall be
dated November 22, 2005, as amended on September suspended, if taxpayer’s whereabouts is not known, in order
16, 2008 not to prejudice the government.
a. CIR renders a decision • However, SC notes that respondent was aware where
b. CIR does not render a decision petitioner may be located.
c. Appeal to the CTA 1. Petitioner caused publication of Notice of Dissolution in
Aug 22, 29 and Sept 5, 2001 issues of Malaya, which
9. Issuance of Tax Credit Certificate included address in Laguna of petitioner.

12
 2. Respondent conducted tax audit for 1999 at its
Canlubang, Laguna address.
• The failure of BIR to note where to send PAN and FAN
should not be taken against BASF. When the deficiency
assessments were sent to old address despite proper
notification of new address, the running of 3-year period to
assess was not suspended.
• The law on prescription being a remedial measure should be
interpreted in a way conducive to bringing about the
beneficent purpose of affording protection to the taxpayer
• As there are no notices sent to petitioner, assessments are
void. In CIR v. Reyes, the SC ruled that if there is no valid
notice sent, the assessment is void. The reason is that “the
law imposes a substantive, not merely a formal requirement.
To proceed heedlessly with tax collection without first
establishing a valid assessment is evidently violative of the
cardinal principle in administrative investigations: that
taxpayers should be able to present their case and adduce
supporting evidence. xxx.”
• A void assessment cannot give rise to an obligation to pay
deficiency taxes, and it divests the taxing authority of the
right to collect them.
2.
MANNASOFT TECHNOLOGY CORPORATION VS. CIR, CTA
8745, JANUARY 13, 2017
3.
OAKWOOD MANAGEMENT SERVICES (PHILIPPINES) VS.
CIR, CTA CASE NO. 7989, AUGUST 8, 2013
4.
CIR VS. SMC STOCK TRANSFER SERVICE CORP, CTA CASE
NO. 889, JUNE 26, 2013
5.
CIR VS. NEXT MOBILE INC., GR # 212825, DECEMBER 7, 2015
6.
ASALUS CORPORATION VS. CIR, CTA CASE 8573, APRIL 2,
2014
7.
LIQUIGAZ PHILIPPINES CORPORATION VS. CIR, CTA 1117
Sept 21, 2015
8.
CIR v. PHILIPPINE TOBACCO FLUE-CURING AND REDRYING
CORPORATION CTA1218 AND 1220 APRIL 11, 2016
9.
LIQUIGAZ PHILIPPINES CORPORATION VS. CIR, CTA EN
BANK 117 June 3, 2016
10.
RP v. CTA & NIELSON & CO., GR NO. L-38540, 149 SCRA 351
DEMAND LETTER/FOLLOW-UP LETTER FOR FOR PAYMENT
OF TAXES CONSIDERED NOTICE OF ASSESSMENT
11.
COLLECTOR VS. BAUTISTA. L-12250, L-12259, MAY 27, 1959,
NOTICE OF ASSESSMENT DEEMED MADE WHEN NOTICE IS
RELEASED, MAILED AND DOES NOT REQUIRE THAT
NOTICE BE RECEIVED WITHIN 3 YEARS PERIOD
12.
CIR VS. METRO STAR SUPERAMA, INC., GR # 185371,
DECEMBER 8, 2010
13.
REPUBLIC VS. RICARTE, GR # L-46893, NOVEMBER 12, 1985
(ACTION TO ASSESS PRESCRIBED SINCE THERE WAS NOT
PROOF THAT NOTICE WAS SENT)
14.
ADVERTISING ASSOCIATES VS. CTA, 133 SCRA 765, P. 939,
NOLLEDO. REVIEWABLE DECISION OF CIR IS WHERE HE
DIRECTS TAXPAYERS TO APPEAL TO CTA NOT MERE
ISSUANCES OF WARRANTS OF DISTRAINT AND LEVY
15.
CIR VS. UNION SHIPPING, GR # 66160, MAY 21, 1990.
DEMAND TO PAY DEFICIENCY TAX CONSIDERED FINAL
DECISION OF CIR
16.
SURIGAO ELECTRIC VS. CTA, 57 SCRA 523. CIR SHOULD
CATEGORICALLY STATE WHETHER ORDER IS FINAL
DETERMINATION SO THAT IT CAN BE APPEALED TO CTA
17.
CIR VS. ISABELA CULTURAL CORPORATION, GR # 135210,
JULY 11, 2001. FINAL DEMAND LETTER FROM BIR IS
TANTAMOUNT TO DENIAL OF REQUEST FOR
RECONSIDERATION WHICH IS THEREFORE APPEALABLE
TO CTA
18.
OCEANIC WIRELESS NETWORK VS. CIR, GR # 148380,
DECEMBER 9, 2005. FINAL DEMAND LETTER FROM
ACCOUNTS RECEIVABLE DIVISION HEAD WAS FINAL
DECISION OF THE CIR AND CONSTITUTED APPEALABLE
DECISION TO CTA.
Since the petitioner did not submit any document in support of his
protest within sixty days from the filing of its protest, the counting
of the 180-day period was from the filing of the protest.
Accordingly, when respondent (CIR) failed to render his decision
within 180 days from the filing of the taxpayer’s protest, petitioner
has 30 days after the lapse of the 180-day period to file an appeal
to CTA
19.
GIBBS VS. COMMISIONER, L-17406, NOVEMBER 29, 1965
(PERIOD TO FILE REFUND CLAIM) AND GIBBS V.
COLLECTOR, GR # L-13453, FEBRUARY 29, 1960 (2-YEAR
PERIOD IS ABSOLUTE) (IF INCOME OF TAXPAYER IS
WITHHELD AT SOURCE HE IS DEEMED TO HAVE PAID HIS
TAX LIABILITY AT THE END OF THE TAX YEAR. IT IS FROM
THIS DATE THAT THE 2-YEAR PERIOD WILL RUN.)
20.
CIR VS. TMX SALES & CTA, GR # 83736, JANUARY 16, 1992
(WHEN TO COUNT 2-YEAR PERIOD IF ON INSTALLMENT
BASIS) IF TP PAYS INCOME TAX ON QUARTERLY BASIS,
THE 2 YEAR PERIOD IS COUNTED FROM THE TIME OF
FILING FINAL ADJUSTMENT RETURN.
21.
COMMISSIONER VS. PHILAMLIFE INSURANCE CO., GR
#105208, MAY 29, 1995. OBITER BY JUSTICE VITUG
REFERRING THE 10-YEAR PERIOD ON TAXES NOT
ERRONEOUSLY / ILLEGALLY PAID. LIKEWISE, THE CLAIM
MUST BE FILED WITHIN 2 YEARS REGARDLESS OF
SUPERVENING CAUSE.
22.
ALSO, THIS CASE, PACIFIC PRO., LTD. CASE GR # 68013,
NOVEMBER 12, 1984, COUNTING OF TWO-YEAR
PRESCRIPTIVE PERIOD FOR FILING CLAIM FOR REFUND
OF OVERPAID CORPORATE INCOME TAX STARTS FROM
TIME FINAL ADJUSTMENT RETURN IS FILED.
If assessment falls on Saturday, Government has next business
day which to assess.
23.
UNITED AIRLINES VS. CIR, GR # 178788, SEPTEMBER 29,
2010
24.
ABS-CBN BROADCASTING CORP., VS. CTA, 108 SCRA 143
(NON-RETROACTIVITY OF RULINGS) REQUIRING 3 YEARS
BACK TAXES AFTER PREVIOUS CIRCULAR VIOLATED SEC.
246
25.
EMILIO S. LIM VS. COURT OF APPEALS, GR # L-48134-37,
OCTOBER 18, 1990. PRESCRIPTIVE PERIOD TO FILE
CRIMINAL CASE UNDER SEC. 281, NIRC, 5 YEARS FROM
FAILURE TO PAY TAX AFTER NOTICE AND DEMAND
26.
COMMISSIONER VS. COURT OF APPEALS, LUCIO TAN, ET.
AL., GR # 119322, JUNE 4, 1996
27.
COMMISSIONER V. CTA AND FORTUNE TOBACCO, GR NO.
119322, JUNE 4, 1996
28.
CIR V. PASCOR REALTY AND DEVELOPMENT CORP., GR
NO. 128315, JUNE 29, 1999 – ASSESSMENT NOT
NECESSARY BEFORE FILING CRIMINAL COMPLAINT OF
TAX EVASION BASED ON SECTION 222 ITSELF.
CRIMINAL CHARGE WITHOUT ASSESSMENT
 BIR conducted a tax audit, and it was discovered that
taxpayer sold property but no return was filed nor payment of
13
 tax made. Revenue officers executed an Affidavit containing
their findings. CIR filed a criminal complaint with DOJ.
When DOJ issued a summons to taxpayer (for it to file a
counter-affidavit with the DOJ on the complaint filed by CIR),
the taxpayer instead considered the affidavit as an
assessment and thereafter filed a protest before the BIR.
 Assessment by the BIR is not necessary before a criminal
charge (for non-filing of return) may be filed by BIR with the
DOJ
 Criminal charge need only be proved by prima facie showing
of failure to file required return and such fact need not be
proved by an assessment
 Issuance of assessment is different from filing of complaint
for criminal prosecution. Issuance of an assessment
involves a civil (tax) liability, while the filing of a criminal
complaint involves a criminal action
29.
CIR V. LASCONA LAND CO., INC.-CA-GR SP NO. 58061.
OCTOBER 25, 2005. WHENTO ELEVATE ASSESSMENT TO
CTA
30.
SAN AGUSTIN V. CIR, GR 138485, SEPTEMBER 10, 2001.
TAXPAYER CAN APPEAL A DISPUTED ASSESSMENT
DESPITE PAYMENT OF DEFICIENCY TAX. FILING OF
REFUND NOT NECESSARY FOR THIS PURPOSE
31.
PHILIPPINE JOURNALISTS, INC. V. CIR, GR 16285,
DECEMBER 16, 2004. WAIVER OF PRESCRIPTION MUST BE
EXERCISED PROPERLY PER RMO 20-90 OTHERWISE,
INVALID.
 Waiver must indicate definite expiration date agreed upon by
CIR and taxpayer
 Waiver should state date of acceptance by BIR. Without the
date, it cannot be determined whether waiver was accepted
before expiration of 3-year period.
 Taxpayer must be furnished copy of accepted waiver. Under
RMO 20-90, second copy of waiver is for taxpayer. Fact of
receipt by taxpayer of his copy should be indicated in the
original copy
32.
CIR V. PHIL. GLOBAL COMMUNICATIONS, GR NO. 167146,
OCTOBER 31, 2006. PRESCRIPTIVE PERIOD TO COLLECT
TAXES ASSESSED BY CIR.
33.
RCBC V. CIR, GR NO. 174942. OPTIONS FOR DISPUTING TAX
ASSESSMENT MUTUALLY EXCLUSIVE.
34.
BPI V. CIR, GR NO. 174942, SUSPENSION OF COLLECTION
REQUIRES REQUEST FOR REINVESTIGATION TO BE
GRANTED
35.
PETRON CORPORATION V. CIR, GR NO. 180385, JULY 28,
2010.
36.
CIR V. GONZALES, GR NO. 180385, JULY 28, 2010
37.
CIR V. ELRIC AUXILLARY SERIVES CORP. CTA, 1174 MARCH
3, 2016
38.
CIR V. ENRON SUBIC POWER CORP, GR NO. 166387,
JANUARY 19, 2009
FACTS:
• Enron is a domestic corporation registered with SBMA as
freeport enterprise. It filed ITR for 1996 showing net loss of
P7,684,948.
• BIR, thru preliminary 5-day letter, informed Enron of
deficiency income tax assessment of P2,880,817.
• Enron disputed the proposed assessment in first protest
letter.
• May 26, 1999, Enron received FAN from CIR and it
protested the same on June 14, 1999.
• Due to non-resolution of protest within 180-day period,
Enron filed petition for review in CTA. It argued the
deficiency assessment disregarded Sec. 228 of Tax Code
and Sec. 3.1.4 of RR 12-99, by not providing the legal and
factual bases of assessment. It also questioned the
substantive validity of the assessment.
• Sept 12, 2001 - CTA granted Enron’s petition and ordered
cancellation of assessment which is void.
• Nov. 12, 2001 – MR of CIR was denied.
• CIR appealed to CA.
• CA affirmed decision of CTA. It held audit working did not
substantially comply with Sec. 228 and RR 12-99 because
they failed to show applicability of cited law to the facts of the
assessment.
• MR filed by CIR was deemed abandoned when he filed
motion for extension to file a petition for review with SC.
ISSUE
• Whether or not Enron was informed of legal and factual
bases of the deficiency tax assessment.
SC RULING
• Sec. 228 of Tax Code provides that taxpayer shall be
informed in writing of the law and the facts on which the
assessment is made; otherwise, the assessment is void.
• To implement such provisions, RR 12-99 provides that the
letter of demand shall state the facts, the law, rules and
regulations, or jurisprudence on which the assessment is
based; otherwise, the formal letter of demand and
assessment notice shall be void.
• The use of the word “shall” in the above legal provisions
indicates the mandatory nature of the requirements laid
down therein.
• In the issuance of FAN, the revenue officers did not provide
Enron with written bases of the law and facts on which
assessment is based. CIR did not bother to explain how it
arrived at such assessment. He failed to mention the
specific provision of the Tax Code or rules and regulations
not complied with by Enron.
• In this case, BIR disallowed certain itemized deductions and
considered some cost items as subject to 5% final tax on
gross income earned, without indicating factual and legal
bases. During the preliminary stage, BIR informed taxpayer
thru preliminary 5-day letter and furnished copy of audit
working paper.
• SC ruled above documents were not valid substitutes for
mandatory notice in writing of legal and factual bases of
assessment. These steps were mere perfunctory discharge
of CIR’s duties in correctly assessing a taxpayer. The
requirement for issuing a preliminary or final assessment,
informing a taxpayer of the existence of deficiency tax
assessment is markedly different from the requirement of
what such notice must contain. Just because CIR issued
an advice, preliminary letter and final notice does not
necessarily mean that taxpayer was informed of the law and
facts on which the assessment was made.
• Law requires that they be stated in the Demand Letter and
FAN. Otherwise, the express provisions of Art. 228 of NIRC
and RR 12-99 would be rendered nugatory. The alleged
“factual bases” in the advice, preliminary letter and audit
working papers did not suffice.
Moreover, due to the absence of a fair opportunity to be
informed of legal and factual bases of assessment, the
assessment is void. Old law merely required taxpayer to be
notified of assessment. This was changed in 1998 and the
taxpayer must now be informed not only of the law but also
of the facts on which the assessment is made. Such
amendment is in keeping with the constitutional principle that
no person shall be deprived of property without due process
39.
CIR V. FMF DEVELOPMENT CORP. GR NO. 167765, JUNE 30,
2008
• Waiver must be in the form identified in RMO 20-90.
• Expiry date of period agreed upon is indicated in the waiver.
• Waiver form requires statement of the kind of tax and
amount of tax due; if not indicated in the waiver, there is no
agreement.
• Waiver is signed by taxpayer or his authorized
representative. In case of corporation, waiver is signed by
any responsible official.
14
 • CIR or his authorized representative shall sign waiver
indicating that BIR has accepted and agreed to the waiver.
• Date of acceptance by BIR is indicated.
• Date of execution and acceptance by BIR should be before
expiration of prescriptive period.
• Waiver is executed in 3 copies; second copy is for taxpayer.
Fact of receipt by the taxpayer should be indicated in the
original copy
40.
FEBTC V. CIR, GR NO. 138919, MAY 2, 2006
41.
CIR V. AZUCENA REYES, GR NO. 159694, JANUARY 27, 2006

• May 19, 1998 - the heirs of Tancinco received FAN and DL

for deficiency estate tax of P14.91 M, inclusive of penalties.
• June 1, 1998 - protest was filed on ground that decedent had
sold property in 1990.
• CIR issued collection letter, followed by Final Notice Before
Seizure dated Dec 4, 1998. WDL was served upon estate.
• Heirs protested WDL and offered compromise by paying
50% of basic estate tax. CIR denied offer and demanded
P18.03 M; otherwise, property would be sold.
• April 11, 2000 - Reyes proposed to pay 100% of basic tax.
As tax was not paid on April 15, 2000, BIR notified Reyes on
June 6, 2000 that property would be sold at public auction in
August, 2000.
• June 13, 2000 - Reyes filed protest with BIR Appellate Div
and offered to pay estate tax without penalties. Without
acting on protest and offer, CIR instructed CED to proceed
with auction sale.
• Reyes filed petition for review with CTA and BIR filed Motion
to Dismiss on ground that CTA has no jurisdiction;
assessment was already final and petition was filed out of
time.
• CTA denied motion.
• In meantime, BIR issued RR 6-2000 and RMO 42-2000,
offering taxpayers with disputed assessments to
compromise cases.
• Nov 25, 2000 - Reyes filed application for compromise and
paid P1.06 M. While waiting for approval by BIR NEB,
Reyes filed with CTA a motion to declare application as
perfected compromise, which CTA denied since NEB
approval is needed.
• Reyes filed for judgment on the pleadings, which was
granted. CTA denied the petition.
• Reyes filed appeal to CA, which granted petition, saying
FAN and DL should have stated the facts and law on which
assessment was based.
• Since FAN and DL did not state facts and law, assessment
was void and proceedings emanating from them were also
void, and any order emanating from them could never attain
finality.
• BIR appealed to SC, which ruled that Sec. 228 of Tax Code
is clear and mandatory – taxpayer shall be informed in
writing of the law and facts on which assessment is based;
otherwise, it is void. Reyes was only notified of the findings
by the CIR, who merely relied on provisions of former Sec.
229 prior to its amendment by RA 8424.
• General rule is that laws apply prospectively. However,
statutes that are remedial, or that do not create new or take
away vested rights, do not fall under the general rule. Since
Sec. 228 of Tax Code, as amended by RA 8424, does not
state that pending actions are excepted from the operation of
Sec. 228, or that applying it to pending proceedings would
impair vested rights, said law may be applied retroactively
42.
JUDY ANNE SANTOS V. PEOPLE, GR NO. 173176, AUGUST
26, 2008
43.
ASIA INTERNATIONAL V. PARAYNO, 540 SCRA 536 (2007)
44.
BRITISH AMERICAN TOBACCO V. CAMACHO., GR NO.
163583, AUGUST 20, 2008;
45.
CIR V. ELRIC AUXILLARY SERVICES CORP. CTA 1174,
MARCH 3, 2026

15